Tax Ratification Election (TRE)

How can the district make up for this shortfall knowing that all other avenues have been exhausted?

We will be calling a Tax Ratification Election in order to maximize the state’s school funding formula and generate additional M&O revenue.

What is a tax ratification election (TRE)?

A TRE is a special election called by the Board of Trustees asking voters to approve an increase above the current $1.04 M&O tax rate. You may recall that the M&O portion of your school tax rate has been at $1.04 for the last 11 years. The State allows for the adoption of a tax rate exceeding $1.04 but this requires voter approval in the form of a tax ratification election or TRE. When voters approve an increase in the tax rate, the Target Revenue level increases. The State then sends additional dollars to the district for the additional effort approved by the voters allowing us to maximize the state funding formula.

How much is the tax rate increase?

After much collaboration with numerous community members, the Klein ISD school board is prepared to set the tax rate at $1.13 which would accommodate the budget until 2021 and allow the district to fund some security projects. The first six cents of the increase will continue to fund the education Klein ISD currently provides. The three additional pennies allows the district to accelerate security projects, not only expediting safety and security measures, but saving more than $5 million in future bond interest.

What happens to the Target Revenue if the TRE is approved?

Target Revenue is raised if the voters ratify the $1.13 tax rate. The chart below illustrates how the nine cent increase maximizes state funding by raising the target revenue amount. The nine cent increase also accommodates the budget until 2021 should there be no increase in state aid during the next biennium while providing funds to escalate security projects now in bond funds.

How will the TRE affect over 65 or disabled taxpayers?

Our citizens with Over 65 or Disabled Persons exemptions have established tax ceilings on their homesteads and those ceilings will not be impacted. In other words, homestead taxes are frozen for our citizens with the Over 65 or Disabled Persons exemptions unless the citizen is currently paying below their tax ceiling.

What security projects are included in the new plan?

The additional 3¢ focuses on security items, incorporating those items immediately into the budget include:

additional police officers for intermediate and elementary campuses

equipment for the police department

secure vestibules for all campuses

entrance screening technology at intermediate campuses

elementary school perimeter and playground fencing

*Current 2015 bonds will fund ongoing mod doors and entrance projects

Can you explain exactly what you mean by maximizing state funding?

Should the TRE pass, the result would maximize the State funding at the highest available amount under the current school funding system. In a nutshell, each normal penny of the M&O tax rate equals about $2.1 million in district revenue from local property taxes. However, the State Funding Formula for super pennies requires the State to match more than double the local contribution. So for the two super pennies, the district receives $4.2 million from local revenue and an additional $9.2 million in State funding, garnering a total of $13.4 million. We are asking for an additional seven pennies that yield local and State funding equal to $15.4 million, thus garnering $28.8 million. It also allows for two additional results: moving the rate to $1.13 would accommodate the budget until at least 2021, meaning we would not need to do another TRE for at least three years, and it would allow the district to accelerate some security projects at our campuses.

What is the impact on the amount of school taxes if the TRE passes?

The average home in Klein ISD is appraised at $200,000. So using this as an example and subtracting your $25,000 homestead exemption, the nine cent increase is $13.13 per month roughly the cost of a 3D movie ticket OR $0.43 per day. A tax calculator is available on the TRE webpage (kisd.us/TRE2018).

What other districts have passed a TRE?

This chart shows that community members in Aldine and Humble have both passed nine and thirteen cent tax increases. Thirteen cents is the maximum amount a district can set the M&O tax rate. Both Katy and Spring Branch ISDs are also taxing above the $1.04 rate.

Statewide, 525 or about half of the school districts have passed a TRE.

How much money comes to public education from the Texas Lottery?

According to the Texas Lottery Commission website, 27.1% of the proceeds go to fund public education.

Is there a correlation between school expenditures and home values?

According to the National Bureau of Economic Research, there is a correlation between school expenditures and home values. A report titled, “Using Market Valuation to Assess Public School Spending” found that for every dollar spent on public schools in a community, home values increased $20.